IMF approves $7.6m debt relief to Burundi

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The International Monetary Fund (IMF) Executive Board approved $7.6 million debt relief for Burundi due over the next three months.

The debt relief which is under the Catastrophe Containment and Relief Trust are due from July 21, 2020, to October 13, 2020. The International Monetary Fund will grant an additional debt relief covering the period from October 14, 2020, to April 13, 2022, which will be subject to availability of resources in the CCRT potentially bringing total relief to an equivalent of $24.97 million.

The debt relief will help free up resources for the needs of the public sector as well as other emergency spending and help ease the balance of payments shock posed by the pandemic.

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Burundi’s effects from the pandemic are through the evolving domestic outbreak and economic spillovers from the global and regional environment.

The 2020 economic growth projections have dropped by 5.3 points to negative 3.2 per cent. The COVID-19 pandemic has created significant external financing needs in 2020 and 2021, mainly due to elevated imports needs, lower exports and reduced remittances inflows. It has also created a substantial fiscal financial need which will mainly have to be met from external sources.

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“The COVID-19 pandemic is having an adverse economic impact on Burundi, creating exceptional fiscal and balance of payments needs. The economy has slowed sharply. The authorities have implemented containment measures consistent with their pandemic response plan that focuses on strengthening the health care system, the social safety net, and parts of the road network to facilitate access to sick people.” Said Mr Mitsuhiro Furusawa, IMF Deputy Managing Director and Acting Chair.

“The IMF’s debt service relief under the Catastrophe Containment and Relief Trust will free up public resources to help address the pandemic. The authorities are committed to using the additional resources to address the COVID pandemic in a transparent manner and have committed to undertake and publish an ex-post audit of COVID-related spending. It will be important to reprioritize fiscal spending on health and other priority social spending as needed.” Mr Furusawa added.

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